NACO receives $710,000 from feds to increase presence in Western, Atlantic Canada

The National Angel Capital Organization (NACO) has received $710,000 from the federal government as it is working to increase its presence across Canada.

The funding comes from two of the federal government’s regional development agencies (RDAs); Western Economic Diversification Canada (WD) is set to provide NACO with $500,000, while the Atlantic Canada Opportunities Agency (ACOA) will provide the angel organization with $210,000.

“NACO is focused on increasing knowledge and networks in emerging ecosystems including in non-urban centres.”

The capital is set to support NACO in the implementation and delivery of angel programs in Western and Atlantic Canada.

The funding from the RDAs comes as NACO has focused much of its attention this year on building out a stronger presence across Canada.
 

In February, NACO announced plans to open a Western Canada regional headquarters in Calgary and expand its investor education programming in Atlantic Canada. NACO’s CEO, Claudio Rojas, told BetaKit at the time that the angel organization was working to increase its presence in Northern Canada, looking to work with Indigenous organizations.

“In activating more angel activity across both urban centres and emerging regional ecosystems, NACO’s programming has expanded to address the scale-up funding gap between angel and venture capital,” Rojas said at the time.

According to NACO’s report on 2019, angel investment activity is distributed unevenly across Canada. Central Canada, including Ontario and Quebec, accounted for 86 percent of investments, compared with 13 percent in Western Canada, and only one percent in Atlantic Canada.

RELATED: New angel group launches to inject early-stage capital into Western Canada tech startups

NACO’s focus on the Western and Atlantic Canada regions it part of the organizations attempts to not only broaden its reach nationally, but also fill those funding gaps.

With the funding from WD and ACOA, NACO is set to launch various programming in the respective regions.

In Western Canada, the $500,000 will be used to help NACO establish its Calgary office. It will also be used to support not-for-profit angel organizations and business accelerators and provide virtual delivery of NACO Academy investment training, mentorship, and ecosystem events.

NACO stated that it is set to work with local innovation organizations to achieve its goals, including the likes of Saskatchewan’s technology incubator Co.Labs, The51, Victoria’s Capital Investment Network, VANTEC Angel Network, and Valhalla Angels in Alberta.

Western Canada is home to a number of successful startups, but the lack of early-stage capital has been cited as a long-standing issue in the region. Twenty-nineteen data from Startup Genome indicated a gap in early-stage funding in Vancouver, for example, citing it as one of the reasons for the city’s big drop in global startup ecosystem rankings.

Sandi Gilbert, managing partner of InterGen and board chair at NACO has often spoken publicly about the need for more angel participation in Western Canada.

RELATED: Atlantic Canada’s First Angel Network shuts down

In Atlantic Canada, the $210,000 from ACOA will be used to support “formal and accessible” angel investor and entrepreneur education, increased investor connection and networking opportunities, and the development and dissemination of “key industry insights and best practices.”

Rojas called the regional initiatives “just the beginning.”

“When entrepreneurs have rapid access to capital in their local communities, they are better positioned to scale their companies into the job creation engines of the future,” he stated. “As long as regional funding gaps persist, we will continue to be faced with untapped potential as a country. By taking a collaborative approach, working in partnership with our national network of angel groups, we can increase access to capital for Canada’s entrepreneurs by an order of magnitude.”

Of late, NACO has also been pushing the federal government to instate a new tax credit intended to incentivize angel investing in Canadian early-stage companies. NACO has been leading a lobbying effort since March to create a tax credit of 30 to 50 percent for angel investments in Canadian corporations or investment funds.

With estimates that a national equity-tax credit could mobilize nearly $15 billion in investment towards Canada’s entrepreneurs, Amanda Filipe, director of the National Initiative for Women Entrepreneurs at NACO, told BetaKit recently that due to the impact of the COVID-19 pandemic the need for such a mechanism has become much more urgent.

“Entrepreneurs are the job creation engines of our local communities, bringing diversity to our economy, creating new solutions and commercializing big ideas,” said Gilbert of the recent funding.

“NACO is committed to supporting the development of a domestic supply chain of capital to fuel the growth and scale of Canada’s entrepreneurs from coast to coast to coast,” she added. “By supporting angel community development across Canada, NACO is focused on increasing knowledge and networks in emerging ecosystems including in non-urban centres.”

Image courtesy NACO

Meagan Simpson

Meagan Simpson

Meagan is the Associate Editor for BetaKit. A tech writer that is super proud to showcase the Canadian tech scene. Background in almost every type of journalism from sports to politics. Podcast and Harry Potter nerd, photographer and crazy cat lady.